Explain what is meant by the economic principle of voluntary exchange
What will be an ideal response?
If two people both produce goods and each has a comparative advantage, and they exchange goods with each other for mutual benefit, it is called a voluntary exchange.
You might also like to view...
Under a binding price ceiling, what does the change in producer surplus represent?
A) The gain in surplus for those sellers who are still willing to supply the product at the lower price. B) The loss in surplus associated with those units that used to be produced at the higher price but are no longer produced at the lower price. C) The gain in surplus associated with the excess demand created by the price ceiling policy. D) Both A and B are correct. E) Both A and C are correct.
If 80 percent of the population receives 75 percent of the income,
a. the richest quintile receives 20 percent of the income. b. the Lorenz curve is the diagonal. c. income is not perfectly evenly distributed. d. the poorest quintile receives more than 20 percent of income. e. people in the middle quintile have the highest incomes.